Written Commentary
MORNING OUTLOOK
New month, same stories. Grains are mixed. SU is down 8 cents and near 14.67. SX is near 14.48. SMU is near 414.9. BOU is near 64.91. CU is up 3 cents and near 6.31. CZ is near 6.22. WU is up 6 cents and near 8.90. KWU is up 3 cents and near 9.55. MWU is up 4 cents and near 9.94.
US stocks are lower. Dollar is higher. Crude is higher. Gold, silver, copper, cocoa, sugar and cotton are lower. Coffee is higher. Fears of inflation and recession slowing consumer spending is sending commodity and metal prices lower.
The first half of 2022 is in the rear view mirror. Steep selloff in equites, Crude, copper and grains highlights the flight away from hard assets. Despite a slow start to US crop season and dry South America weather at the end of the day surging China covid restrictions and short supply of food and fuel and an increase in post covid US demand fueled unprecedented inflation.
SN dropped from 17.84 to a low of 15.82. BON from 87 to 65. SMN dropped from 484 to a low near 395 only to rally back to 478. CN dropped from 8.24 to 7.20 and is back near 7.50. WN dropped from 12.84 to 8.61.
Yesterday USDA est US June 1 corn and soybean stocks were higher than last year and above levels that reflect tight supply, strong board futures inverses and strong basis. Some feel final US corn and soybean exports could be higher than USDA est but futures care more about margin calls and strong trend of seasonal tops in late June than strong basis.
Ukraine war rallied wheat futures but high prices may have rationed demand enough to send futures lower. Many feel now, grain futures are oversold and due for a bounce. A bounce is limited until more is known about World 2022 crops and final demand. US corn and soybean crop ratings are dropping but still above trend. Next 30 days, US Midwest temps and rainfall will now be key to futures with rain forecasted for next week. NOAA 30 day forecast is warm and dry. Bulls are gone. Bears are in control unless US July and August weather is warm and dry.
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